The Benefits and Drawbacks of Obtaining A Student Creditcard

2007-03-08 10:33:40

( Financial )



Applying for a student MasterCard or for student Visa cards can be a convenient financial option for your child who moves to another state to go to college. In most instances, parents are concerned that applying for student creditcards can lead to creating debts, which may be difficult to settle. Giving a student creditcard to your child can instill responsibility; however, before applying for a student creditcard, you should discuss a number of matters with your child, and decide on a few issues:

Student creditcards can either be issued with your child’s name, or as a supplementary card. With the former option, you are unable to control your child’s finances, but this will allow your child to start building a personal credit history.

By opting for a supplementary card you have the freedom to control the credit limit of the card, and control your child’s spending. It will be your credit history that will be at stake here.

Decide on the purpose of obtaining a student MasterCard or a student Visa cards. Decide whether it will be used to provide a monthly allowance for everyday expenses, to pay for books, food, emergencies, or all of the above. It is important to note here that the typical credit limit for student creditcards is not much; however, some credit card companies can also offer higher credit limits at the request of parents.

When applying for credit cards ensure that you compare the terms and conditions of each brand of credit card.

Checking out the annual percentage rates of each card is also important. These rates influence the total amount that you need to pay each month.

Finally, you should also obtain information on the cost of annual membership fees, transaction fees and other miscellaneous charges that need to be paid.

Student creditcards can be helpful to a student, but should be used wisely and responsibly.


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